SDI Group (SDI) Management Interview - January 2025

PIWORLD audio investor podcasts

An Interview with SDI Group CEO, Stephen Brown, providing an overview of the business, its refreshed strategy and insight into the acquisition of InspecVision.

Read the research here.

00:00 - Introduction

00:28 - Can you give a brief overview, and tell us about the breadth of the business and the technological expertise that sits within the SDI Group?
01:21 - Despite the difficult end markets, particularly in lab equipment how have you navigated these external challenges?

01:50 - What is the strategy of SDI and how is that translated into a sustainable operational reality?

02:34 - Can you tell us a bit more about what you did as part of the Strategic review that has now completed and what has been Implemented as part of the new strategic framework?

03:45 - What are the Long-term growth drivers for SDI and which businesses are best placed?

04:07 - One of the key attractions has been the levels of cash generation in the business and the ability to fund acquisition, can you say any more on this?

04:40 - Tell us what you are seeing M&A wise and what are you looking for when you buy a business?

05:15 - Tell us more about your most recent acquisition, InspecVision? Where does it sit and what opportunities do you see going forward?

06:02 - You clearly have strong access to capital and a healthy balance sheet to support the active M&A pipeline. Can you talk more about acquisition opportunities?

06:44 - You have recently resegmented the group and introduced a very clear mandate to grow the business both via organic growth and acquisition. Can you tell us more about how this is progressing?

07:30 - Can you expand on any of the operational efficiency initiatives to support margin growth?

08:05 - What are the benefits for portfolio companies, being part of SDI Group? Why would a management team decide to sell their business to SDI?

08:56 - We’ve touched on what sets SDI apart as a preferred buyer but some of your recent acquisitions have given you a broader geographic reach also. Can you say anymore about further geographic expansion opportunities?

09:28 - Just to finish off with the conundrum between M&A and organic growth, can you just end with your thoughts on this and any closing comments on SDI?

SDl Group is an AIM-quoted group specialising in the acquisition and development of a portfolio of companies that design and manufacture niche analytical technology products for use within digital imaging and sensing and control applications in science, technology and medical markets. The group operates a well-established 'buy and build' strategy, supplementing organic growth with earnings-accretive acquisitions of complementary businesses that have sustainable profits and cash flows. Targets are primarily UK businesses with established reputations, capable of achieving significant organic growth through developing export markets. SDI Group takes a decentralised approach, with seasoned local management given broad discretion to run group businesses within defined limits. SDI Group typically acquires businesses generating up to £1m EBIT for around 4-6 times EBIT plus net assets, including earnout payments.